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Watch List: Aug. 9, 2017

|August 11, 2017

The items listed below represent potential emerging issues that our analysts are tracking. These can be long term or short term, but will be updated daily. If an item on our Watch List becomes critical, we will email you a full analysis explaining its significance.

Each Saturday, we will follow up our daily Watch List for each week with our conclusions on these issues.

  • South Korea: An official from South Korea’s presidential office said that the North Korean conflict is not an imminent crisis and that a diplomatic resolution is highly probable. Will South Korea make its own deal with the North to head off war? What would it look like?
  • Russia: The pressure on Russia is building. In response to queries about rumored U.S. training facilities being built in Moldova, Russian Deputy Prime Minister Dmitry Rogozin said the U.S. was going to start training special operation forces there. Ukraine canceled an agreement with Russia on military exports. The Czech ambassador to Ukraine suggested that the Czechs might supply Ukraine with certain types of military equipment. The Polish foreign minister raised the possibility of NATO responses to any potential Russian military activity. This looks like an orchestrated response driven by the U.S. to isolate Russia. Russia can’t simply accept this. What are its options?
  • U.S.-China: The U.S. has delayed trade actions against China and, according to American officials, the U.S. is holding back on sanctions against Chinese banks after China supported a U.N. Security Council resolution against North Korea over the weekend. The center of gravity of the U.S.-China relationship continues to be North Korea, not trade. As things develop, we need to be constantly imagining how various scenarios on the Korean Peninsula will affect this relationship.
  • India-China: Indian Prime Minister Narendra Modi is planning to go to Myanmar, a country of interest to China, early next month. The confrontation between India and China – already tense around Bhutan and the Dolam plateau – seems to be spreading. What imperatives on both sides are driving this confrontation right now?
  • Commodities: Australian iron and coal exports surged 17 percent in the first half of the year, while total imports rose just 1.6 percent, leading to the first trade surplus since 2011, according to the Australian Bureau of Statistics. In Indonesia, meanwhile, state-owned mining company Aneka Tambang has resumed exports of raw nickel and bauxite six months after the country lifted a three-year ban on the export of raw minerals. Are we looking at a shift in the architecture of the global industrial minerals market? The model we have followed since 2015 may be obsolete. This deserves close scrutiny.

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